Contributions to a marriage - still searching for that something special?

Marriage is a partnership of equals. In the case of White v White [2001], the most senior judges in England recognised that there is 'no place for discrimination between the husband and wife and their respective roles' when it comes to determining a 'fair' division of the matrimonial property upon divorce. The starting point is that marital assets should be split 50:50, unless there is 'good reason' to order otherwise.

In our Spring 2015 Newsletter, Michael Gouriet and Jemma Thomas provided a detailed overview of the case law relating to one such 'reason' to depart from equality, namely the 'special contribution' of one spouse to the marriage. The article references the first instance judgment in this case of Work v Gray, handed down in April 2015 and in which Mr Justice Holman found that Mr Work's claim for special contribution did not have the requisite 'exceptional and individual quality' to justify an unequal split of the pot. Mr Work had undoubtedly worked incredibly hard and achieved fantastic success in his field, Holman J said, but he was ultimately an employee whose achievements owed much to being in the right place at the right time.

Mr Work appealed the decision, arguing that the quantum of wealth generated as a result of his own genius, in and of itself, was so significant that to ignore it would result in an 'unfair' outcome. Family law practitioners' ears pricked up as a result, hoping that the Court of Appeal would, in reaching its decision, offer some guidance as to what exactly constitutes a 'special' contribution to a marriage.

Background

Mr Work and Ms Gray were married in their native US in 1995. Mr Work made an enormous success of his role at private equity firm, Lone Star in Japan and as a result of his application of 'groundbreaking methodologies…to the distressed debt sector', earned in excess of $300m. Ms Gray meanwhile was focused on raising the parties' children. By the date of the hearing before Holman J, the marital 'pot' totalled $225m.

Decision

Holman J split the marital pot 50/50, and Mr Work appealed. His appeal was dismissed in a judgment handed down by the Court of Appeal on 11 April 2017.

The appeal judges agreed that in some cases the amount of wealth generated by one party will be extraordinary enough to deserve special treatment. Often, however, he or she will need independently to establish an 'exceptional' quality responsible for the contribution. It need not be a contribution of 'genius' or be 'unmatched' by the other spouse, but it should be unique. Holman J had not erred in finding Mr Work's contribution was not sufficiently unique to justify an unequal division of the assets.

Some family law practitioners had hoped that the judgment would provide a financial threshold above which a special contribution would be self-evident, or would otherwise offer commentary on what other exceptional qualities these special contributors may exhibit. Others who argued that the concept of a special (financial) contribution is inherently discriminatory towards the non-financial role of the other (often female) spouse, had hoped the court would abolish the concept altogether. Both camps were left unfulfilled.

However, the judgment does confirm that only the most unique of contributions will give the court 'good reason' to depart from the 'yardstick of equality'.

The court's endorsement of the je ne sais quoi quality of the 'special contributor' almost certainly means Mr Work's case will not be the last of its kind to come before some of our most senior judges. Given the vast sums of money involved in these cases, there is often more to be gained by achieving an unequal split of the marital pot than there is to be lost (at least financially) through litigating cases like this to the very end. To date there are only three reported cases where the Court has decided to award a greater share of the marital wealth on the basis of special contribution (Sorrell v Sorrell [2005] where the percentage split was 60:40; Charman v Charman [2007] – 65:35; and Cooper-Hohn v Hohn [2014] – 64:36). The Withers' family law team acted for the successful husband in all three of those cases.

This article forms part of our Autumn 2017 family newsletter, alongside the other articles found in the Insight section below.